The Miller Porter Company sells powder coating

equipment at a sales #3408

The Miller-Porter Company sells powder coating equipment at a sales price of $50,000 per unit.
The sales price includes delivery, installation, and initial testing of the equipment, as well as a
monthly service call for one year in which a technician checks to make sure that the equipment
is working properly and makes adjustments as needed. After the first year, customers are given
the opportunity to enter into an extended service agreement; Miller-Porter prices these
extended service agreements to earn an expected gross profit of 50 percent. Given the wages
paid to technicians and the time required to make a service call, the company estimates that the
cost of providing each monthly service call is $200.Required:Develop a revenue recognition
policy consistent with IAS 18 for The Miller-Porter Company for its sales of power coating
equipment.View Solution:
The Miller Porter Company sells powder coating equipment at a sales

ANSWER
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